House and Senate move to claim Clean Water Fund money for property tax rebates

by Trevor Russell

Both the House and Senate are moving to use of Clean Water Funds to fund a property tax credit, a clear violation of the Legacy Amendment.  


The 2008, Minnesotans voted for the Clean Water, Land & Legacy Amendment. The amendment increased our sales tax to invest in our environment and cultural heritage.

The water portion of these funds (about 1/3rd of the money raised each year) goes to the “Clean Water Fund”. The constitutional language approved by voters clearly specifies the scope of allowable uses for the Clean Water Fund. These dedicated funds must be: “…[S]pent only to protect, enhance, and restore water quality in lakes, rivers, and streams and to protect groundwater from degradation and at least five percent of the clean water fund must be spent only to protect drinking water sources. Minn. Constitution, Art. XI, Section 15.”

Conspicuously absent from the above list: property tax relief.

But that has not stopped the Legislature this session.

What’s in the bills?

Legislators have introduced bills in both chambers (SF 3960 / HF 4395) that seek to use Clean Water Funds to pay for a tax credit given to landowners with buffers along public waters. However, the credit it is not compensation for the cost of establishing a buffer. Instead, it is a permanent payment for the purpose of property tax relief.

There are several serious problems with this approach:

  1. An ongoing flat rate tax credit is not consistent with the constitutional limits on the Clean Water Fund. Voters approved these constitutionally dedicated funds believing that legislators would stick to the rules, not redirect money to other uses.
  2. Such credits are estimated to cost over $27 million in the next biennium – about 12% of the entire Clean Water Fund. Diverting clean water funds for tax credits would substantially reduce the money available for restoration and protection programs.
  3. The Clean Water Fund expires in 2034. The proposed tax credits would be permanent, but would not have a permanent funding source – a recipe for financial disaster moving forward.
  4. The legislature has traditionally funded tax credits through the general fund.

Using constitutionally dedicated funds for permanent tax relief is inappropriate. That’s why FMR and our conservation partners have called on legislators and Governor Dayton to reject this unwise approach.

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